Nvidia Done With Jensen Huang; Congress Eyes Tighter Chip Curbs
The scandal around Nvidia CEO Jensen Huang is giving U.S. lawmakers new momentum to restrict China's access to advanced AI chips, days before a planned Trump-Xi meeting. Analysts say the summit is unlikely to be derailed, but offshore data centers face fresh scrutiny.
The scandal engulfing Nvidia CEO Jensen Huang, a story in which Nvidia is now done with Jensen Huang, is strengthening the case among U.S. lawmakers for tighter limits on China's access to advanced AI chips, days before President Donald Trump's planned meeting with Xi Jinping next week.
Analysts say developments so far are unlikely to derail the summit. Tougher U.S. chip curbs could still irritate Beijing.
Why lawmakers see an opening
The alleged affair involves Alice Huang, a Chinese citizen who is not related to Jensen Huang. She was reportedly recruited by Chinese intelligence to gather information. She also helped facilitate at least $7.5 billion in Nvidia chip shipments to China, according to a report cited in the story.
Lawmakers want to use the episode to push chip-control measures into this year's National Defense Authorization Act, the annual defense policy bill. The bills include the AI Overwatch Act, the Chip Security Act and the MATCH Act. All aim to limit the flow of advanced chips to U.S. adversaries, particularly China.
Huang had been among the loudest voices against strict U.S. export controls on advanced chips sold to China, which irked some China hawks. David Meale, head of Eurasia Group's China practice and a former deputy chief of mission at the U.S. embassy in Beijing, called him "the industry's most effective lobbyist against tighter rules."
The scandal has weakened Nvidia's "singular ability to slow the progress of those bills," Meale said. It has also made it "politically harder for negotiators to strip chip provisions out of this year's NDAA."
Washington reacts
Senate Democratic leader Chuck Schumer called on Congress on Tuesday to pass the bills. He also urged a full accounting of Trump's defense of Huang.
Kyle Chan, a China fellow at the Brookings Institution, said Trump's weakened grip over congressional Republicans after the midterm defeat makes it harder for the administration to hold such measures back.
Offshore data centers in focus
The fallout also threatens to bring fresh scrutiny to data-center hubs outside China that give Chinese customers access to Nvidia chips barred from direct export there.
Short seller Culper Research estimated in May that more than 20% of Nvidia's revenue for the year ended July 2025, about $43.2 billion, came from China through illegal GPU diversion and Southeast Asian intermediaries.
The Commerce Department is reportedly finalizing a rule to stop Chinese AI firms from remotely accessing advanced chips through data centers in other countries. Tech firms including Nvidia have long opposed the effort, which has gained renewed momentum since the Nvidia revelations.
Gabriel Wildau, managing director at political risk consultancy Teneo, said pressure is building on the White House to address remote access. Action "now appears likely," he said, and could include blacklisting Megaspeed and other entities or introducing rules that close the loophole entirely.
Some Chinese AI companies have reportedly started searching for Nvidia-powered computing capacity at data centers outside China. Traders and intermediaries are also stockpiling the processors in anticipation of tougher U.S. enforcement.
